What's happening
This bill requires New York employers to pay severance to employees affected by plant closings, relocations, or mass layoffs.
Why it matters
Guarantees financial support for displaced workers. by requiring employers to pay severance equal to at least one week of pay for every full year worked, helping employees better manage the sudden loss of income due to plant closures, relocations, or mass layoffs.
Imposes additional penalties for inadequate notice. if an employer fails to provide legally required advance notice, affected employees receive an extra four weeks of severance pay, creating a strong incentive for compliance with notice laws.
Ensures severance is calculated fairly. by mandating it be based on the higher of either the employee’s final regular pay rate or their average earnings over the past three years, potentially increasing the benefit for long-term or recently promoted workers.
Prevents employers from circumventing benefits. by requiring that severance under this law be at least as generous as what might already be required by union contracts or other agreements, and by restricting waivers of severance rights unless approved by a court or state official.
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Who cares
Headline styles
Require Severance for Layoffs
Plain English, a few words. Used as the page title.
Sponsors
History
- Referred to labor
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
8377
IN SENATE
May 19, 2020
Introduced by Sen. MAYER -- read twice and ordered printed, and when printed to be committed to the Committee on Labor
AN ACT to amend the labor law, in relation to requiring employers to pay severance to employees when there is a plant closing, relocation, or mass layoff
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The section heading of section 860-g of the labor law, as added by chapter 475 of the laws of 2008, is amended to read as follows:
Violation; liability; severance.
§ 2. Section 860-g of the labor law is amended by adding a new subdivision 9 to read as follows:
9. Whenever there is a plant closing, relocation, or mass layoff under this article, the employer shall pay severance to each employee entitled to notice who lost his or her employment equal to one week of pay for each full year of employment. An employer who fails to give notice as required by paragraph (a) of subdivision one of section eight hundred sixty-b of this article before ordering a mass layoff, relocation, or employment loss shall pay each such employee an additional four weeks of severance pay. The rate of severance pay provided by the employer pursuant to this section shall be the average regular rate of compensation received by the employee during the last three years of employment with the employer, or the employee's final regular rate of compensation, whichever is higher. Severance under this subdivision shall be regarded as compensation due to an employee for back pay and losses associated with the termination of the employment relationship, and earned in full upon the termination of the employment relationship, notwithstanding the calculation of the amount of the payment with reference to the employee's length of service. The employer shall pay the severance pay required pursuant to this subdivision or the severance pay required by a collective bargaining agreement or for any other reason, whichever is greater. The severance provided for an employee by this subdivision shall be reduced by any back pay paid to the employee pursuant to subsection 5 of section 2104 of the federal Worker Adjustment and
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD15474-01-0
S. 8377 2
Retraining Notification Act (29 U.S.C. Sec. 2104 et seq.), because of a violation of subsection 3 of section 2102 of such act (29 U.S.C. Sec. 2102 et seq.). No waiver of the right to severance provided pursuant to this subdivision shall be effective without approval of the waiver by the commissioner or a court of competent jurisdiction.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the labor law, in relation to requiring employers to pay severance to employees when there is a plant closing, relocation, or mass layoff
Purpose or general idea of bill
Guarantees severance pay for employees when there is a plant closing, relocation, or mass layoff covered by the WARN Act.
Summary of provisions
Section 1 amends the title of section 860-G.
Read the full memo (605 words)
Section 2 adds a new paragraph 9 to section 860-G to require that an employer that must give notice to its employees in connection with a plant closing, relocation, or mass layoff subject to the WARN Act is required to pay severance to its employees at a rate of one week of pay for each year of employment. In addition, if the employer failed to give timely notice to its employees, the employer must pay an additional four weeks of severance. If the employer is otherwise required to pay sever- ance to an employee for any other reason, the employee will receive the greater of: the amount provided for by this paragraph, or the amount of severance otherwise required to be paid, but not both. The severance obligations are offset by any back pay that is paid to employees pursu- ant to the federal WARN Act.
Section 3 sets the effective date.
Justification
When a worker decides to continue an employment relationship with a single employer for a long period of time, that worker foregoes other opportunities: other jobs, other skills, and other experiences. This can significantly jeopardize their prospects for any other employment. They may be seen by new prospective employers as lacking a bright future, unable to be trained for a new job, or dismissed in the job market as "past their prime". A worker that loyally sticks with an employer year after year makes a sacrifice that should be respected and recognized by the employer.
Too often, however, this does not happen, especially in the corporate takeover context. Private equity, hedge fund, or other investor or cred- itor pressures that result in layoffs have become commonplace. To name a few: Toys 'R Us in 2019, Tops Markets in 2018, and the Doral Arrowwood Resort earlier this year. In these situations, private equity, or other investors with a "financialization" approach to business, acquired control of the companies only to effect layoffs and closures that are financially engineered to result in investor profits at workers' expense. Imposing a severance requirement will have both a deterrence effect on financially engineered layoffs, and provide additional compen- sation to workers who suffer job losses as a result.
More importantly, regardless of the context, business closures and mass layoffs necessarily entail widespread and enormous disruption of work- ers' lives and livelihoods. Furthermore, because traditional unemploy- ment assistance only pays a portion of a worker's typical wages, it does not function as a true income replacement for workers who, through no fault of their own, lose the job that allows them to meet their expenses. For those who struggle to put food on the table and make rent even before being laid off, full severance pay can be the difference when it comes to surviving financially until new employment can be found.
Ultimately, by requiring severance in such situations, this bill recog- nizes the value of year upon year of loyal service, what other opportu- nities workers have foregone to give that service, and the importance of taking efforts to ensure that these job losses do not mean financial ruin for workers.
Prior legislative history
None.
Fiscal implications
None
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.